Another big week in Australia ahead to be dominated by the jobs report for January, and the first major week of December half and full year reporting companies, led by the Commonwealth Bank, Telstra and Rio Tinto.
A total of 30 major companies are due to report this week, but don’t forget the early flow of economic data from China with trade and inflation figures released this week.
In fact the CBA interim on Wednesday will go a long way to setting the tone for the wider market. If the comments for the rest of the year are upbeat, the current market malaise will fade away, especially if its accompanied by a higher dividend.
Ahead of the CBA’s announcement midweek, Macquarie Group is expected to make a bullish operational update later today.
Analysts reckon the results overall won’t be as gloomy as earlier forecasts had predicted. They point out that dividend payouts will be a bit higher than expected as well.
"Consensus expectations are for 14% earnings growth in 2013-14 led by 35% growth in resources profits on the back of the lower $A and reduced capex and 8% growth for industrials, so earnings results should show signs of this turnaround starting to come through," the AMP’s Dr Shane Oliver said.
"Key themes are likely to be the benefits of the lower $A for miners and offshore earnings, early and tentative signs of top line revenue improvement, ongoing focus on cost control and solid dividend growth," he added.
Boral will confirm its first half rebound, and hopefully provide more detail about its predicted second half slowdown.
The ASX reports its interim result on Wednesday, with Boral and the CBA. STW Communications reports its full year figures later in the week and Sims Metal releases interim figures on Friday.
And then there’s the jobs report – it will be weak, again. Most forecasts are for up to 10,000 new jobs to have been created last month, with the jobless rate edging up to 6%.
Some analysts will argue that sits at odds with what the Reserve Bank said last week in its new, firmer forecasts for the economy this year.
But it will be in keeping with the RBA’s current stance because the bank’s Statement of Monetary Policy on Friday carried repeated mentions of soft wages and rising unemployment.
In fact the central bank reckons it will be 2015 before employment starts improving.
Before then we will get housing finance data and house prices (both tomorrow).
The NAB business survey (also tomorrow) and consumer confidence (on Wednesday) will also be watched closely.
In China, the monthly flow of data starts midweek with the trade figures for last month released on Wednesday.
Car sales data will also be made public and Friday sees the inflation figures for January out. Bank lending figures are also due for release.
Chinese data for January is expected to show softish exports and imports and another fall in inflation to 2.4% (Friday) but a pick up in bank lending and total financing.
The AMP’s Dr Shane Oliver reminds us to remember "Chinese data over the January/February period is notoriously unreliable due to the floating New Year holiday" which started right at the end of January and absorbed most of last week."
Elsewhere in Asia, Japan sees an update on consumer confidence and India issues its latest trade balance.
In the US, a slightly calmer week, which will be dominated by the first public appearance and commentary by new Fed chairman Janet Yellen.
She makes two appearances before the US Congress this week – the first on Tuesday night, our time, before the House Financial Services Committee and then the Senate Banking Committee two days later.
Yellen, the Fed’s current vice chair, last spoke publicly at her Senate confirmation hearing on November 14, before the Fed took its first step to wind down its massive bond-buying program.
Markets will be looking at her views on the so-called tapering of the Fed’s quantitative easing and the thinking on future monetary policy moves now that unemployment has fallen to 6.6%, which is very close to the central bank’s target of 6.5%. That is likely to be changed in coming months by the Fed.
US fourth quarter reporting winds down this week with Pepsi Co releasing its latest figures. Tech giant Cisco will also report (its reports and commentaries from management have a habit of changing markets). Telco Sprint also reports. Deere and Co, the big farm equipment manufacturer, reports and the big US insurer MetLife is another to report this week.
Fast food giant McDonald’s Corp reports its global January sales tonight our time and they will get a lot of attention.
That is because the company last month reported weaker-than-expected quarterly sales at established restaurants as fewer people ate at the fast-food chain. McDonald’s warned that sales would again fall short of market expectations in January.
Thomson Reuters said on Friday that so far in this reporting season, of the 343 companies in the S&P 500 that have so far reported earnings, 67.9% have topped Wall Street’s expectations, slightly above the 67% rate for the past four quarters and ahead of the 63% rate since 1994.
On the US data front a slow week: January retail sales (on Thursday night our time) and industrial production (on Friday night our time) are two important reports. Both are likely to have been impacted by the record cold weather and snow storms last month.
In Canada the latest federal budget will be issued on Tuesday night, our time, along with the latest housing starts data, which will be important due to the growing fears about the health of the country’s housing boom. House price data will be on Thursday night, our time, which will also be examined closely to see if the boom is under control, or still continuing unchecked.
In the Eurozone, a big week, dominated by the first reading of 4th quarter GDP Friday night, our time.
Forecasts are for a rise of 0.3%, but analysts will be looking at how fast France, Italy and Germany grew. Given that Germany is well into its recovery, the question will be if the French and Italians economies are back on the growth track. Industrial production data are issued in France and Italy.
Germany also issues its half year economic outlook on Tuesday night, our time. The latest Eurozone trade figures are also due for release on Friday night, our time.
In the UK, the Bank of England’s inflation report and monetary policy statement are due out midweek. Retail sales data will also be release this week for January.
European quarterly, half year and full year reports start flowing this week. Barclays in the US, Renault in France and the giant Heineken beer group of Holland will all be out.
